We highlight four quantum computing companies with recent price run-ups and high Hudson Labs forensic risk scores. Quantum computing stocks have been soaring lately and have started to pop up in our search for Movers and Shakers. Also, we have now turned this popular market highlight section into a new screening dataset updated daily. Login to explore more companies with high HL forensic risk scores & recent price run-ups.
D-Wave Quantum Inc. $QBTS | $1.7B
- Up over 300% in the last 3 months; its latest Hudson Labs forensic risk score is 76.
- Since its IPO in 2022, QBTS has repeatedly reported insufficient accounting personnel/expertise.
- Resulting in 3 restatements since 2023
- 2024: incorrect accounting for government assistance arrangements
- 2023: incorrect accounting for the Lincoln Park Purchase Agreement
- Cash crunch: the company's liquidity condition raises substantial doubt about its ability to continue as a going concern.
- As of Q3’24, it had an accumulated deficit of $540.9 million and is expected to incur additional losses and negative cash flows going forward.
- QBTS relied on venture loans from PSPIB Unitas Investments II Inc., a related party to its largest shareholder, PSP Investments. This $50M loan has been repaid in full this October.
- PSP is a Canadian public pension plan (crown corporation) and holds 36.76% of QBTS’ total voting power. Two members from PSP sit on the company’s 8-member Board of Directors.
Rigetti $RGTI | $1.7B
- De-SPAC, up about 300% over the last month and 600% in the last three months; HL forensic risk score at 68.
- Repeated material weakness since 2021:
- Initially over financial reporting related to warrants and complex financial instruments (SPAC issues).
- Most recently, also related to the preparation of account reconciliations.
- With ongoing material weakness comes ongoing restatements
- Their quarterly financial statements for the period ending March 2022 have been restated 7 times, most recently in March 2024.
- CFO change in Feb 2023 has not helped with their accounting issues.
- The CEO and founder, Dr. Chad Rigetti, resigned in 2022.
IonQ Inc. $IONQ | $8.5B
- De-SPAC, up over 300% in the last 3 months; its latest HL forensic risk score is 64.
- Executive turnover: Two co-founders (Chief Scientist and CTO) left the firm to return to academia within six months of each other in Oct 2023 and Feb 2024. Never disclosed via 8-K, this is a possible SEC reporting violation.
- Accounting: IonQ excludes depreciation and amortization related to quantum computing systems and software from its Cost of Revenue.
- History of related party risks with two universities:
- University of Maryland (UMD): the company earned revenue from UMD by providing quantum computing services and facility access. plus customized quantum computing hardware. It also has an operating lease of $3.2M right-of-use asset (UMD is no longer a related party following the departure of co-founder Chris Monroe).
- Duke University: In July 2016, IonQ entered into an exclusive agreement with Duke to license certain intellectual property and purchase R&D services. In exchange, the company issued common shares to Duke for its R&D services through July 2026. (Duke is no longer a related party following co-founder Jungsang Kim's departure).
- Its LTM total revenue is $37.47M, but it is still unprofitable with an LTM EPS of ($0.81).
Quantum Computing Inc. $QUBT | $1.7B
- Up 350% in the last 3 months; latest HL forensic risk score is 71.
- Originally, the company was formed as Ticketcart, Inc. in 2001, focused on selling ink-jet cartridges. Then pivoted to beverage distribution as Innovative Beverage Group Holdings, Inc. Got sued by a shareholder in 2017 for fraud and breach of fiduciary duties, lost the suit, went into receivership, sold $155K of common stock to Convergent Risk Group (CRG).
- CRG’s CEO Robert Liscouski, became QUBT’s board chairman, changed the firm’s domicile from North Carolina to Delaware, renamed it Quantum Computing, and changed the trading symbol to “QUBT”. (source)
- On June 16, 2022, the Company merged with QPhoton, Inc., a developer of quantum photonic systems, technologies and applications.
- Spotlight on management:
- Robert Liscouski’s contract as CEO ended in January 2024 but he continues to serve as a Director. He was also the President of Implant Sciences Corp. (from 2011 to 2019) which filed for bankruptcy on October 11, 2016 (source).
- Most executive members do not appear to have direct experience in quantum physics. The Chief Quantum Officer, Yuping Huang, is the only exception (source).
- Since at least 2018, the company has had ongoing material weaknesses including over revenue recognition.
- In May this year, it delayed its 10-Q filing due to BF Borger’s audit misconduct. QUBT replaced its auditor with BPM LLP in June 2024. As a result of BPM’s re-audit, it made material adjustments to its financial results for 2022 and 2023 related to the QPhoton Merger, stock-based compensation, and financing costs.
- 10-K/A For FY23, net loss decreased by $2.7M, lifting EPS by 4 cents to ($0.42). Total assets decreased by $4.4M (mainly intangible and goodwill).
- QUBT has also issued multiple going concern warnings since March 2023. As of Q3’24, it has accumulated a deficit of $149.2M with working capital of just $1.5M.
